First Trust To Begin Trading The First Trust International Multi-Asset Diversified Income Index Fund (NASDAQ:YDIV)

August 22, 2013 12:43pm FUND LAUNCH NASDAQ:YDIV

newetf1First Trust has announced that they will begin trading the First Trust International Multi-Asset Diversified Income Index Fund (NASDAQ:YDIV) Friday, August 23, 2013. The First Trust International Multi-Asset Diversified Income

Index Fund will seek investment results that correspond generally to the price and yield (before the fees and expenses) of an index called the NASDAQ International Multi-Asset Diversified Income Index.

Total Annual Fund Operating Expenses: 0.79%


The Fund will normally invest at least 90% of its net assets (plus the amount of any borrowings for investment purposes) in (1) non-U.S. dividend paying equity securities and/or depositary receipts, (2) non-U.S. real estate investment trusts (“REITs”), (3) non-U.S. preferred securities, (4) non-U.S. infrastructure companies and (5) an exchange-traded fund (“ETF”) that invests in non-U.S. fixed income securities, all of which comprise the Index (each, an “Index Segment”). The ETF in which the Fund invests may invest in high yield fixed income securities, commonly referred to as “junk” bonds. [Infrastructure companies include equity securities of companies classified as utilities and royalty trusts by the Industry Classification Benchmark (“ICB”).]

In general, “non-U.S.” shall mean securities issued or guaranteed by companies organized under the laws of countries other than the United States (including emerging markets), securities issued or guaranteed by foreign, national, provincial, state, municipal or other governments with taxing authority or by their agencies or instrumentalities and debt obligations of supranational governmental entities such as the World Bank or European Union. The Index is designed to provide access to a diversified portfolio of small, mid and large capitalization income producing securities. The Index will be comprised of the five Index Segments in the following manner:

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Dividend-paying Equity Securities 25%
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REITs 20%
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Preferred Securities 20%
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Infrastructure Companies 20%
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Fixed-Income ETF 15%
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The Fund, using an indexing investment approach, attempts to replicate, before fees and expenses, the performance of the Index. First Trust Advisors L.P. (“First Trust” or the “Advisor”), the Fund’s investment advisor, seeks a correlation of 0.95 or better (before fees and expenses) between the Fund’s performance and the performance of the Index; a figure of 1.00 would represent perfect correlation. First Trust will regularly monitor the Fund’s tracking accuracy and will seek to maintain an appropriate correlation.

The Index is owned and was developed by The NASDAQ(R) OMX Group, Inc. (the “Index Provider”). The Index Provider also calculates and maintains the Index. The Index is designed to provide access to a diversified portfolio of non-U.S. securities. The Index employs a modified market cap weighting methodology in which larger companies receive a larger Index weighting. The Index weighting methodology also includes caps or ceilings to prevent high concentrations among larger stocks and assigns a pre-set weight to the five Index Segments at each quarterly rebalance. Each Index Segment has a set of separate and distinct eligibility rules and weighting procedures as described in this prospectus under “Index Information.”

The Index Provider evaluates the Index components quarterly in March, June, September and December of each year for eligibility, using market data through the end of January, April, July and October, respectively. Eligible components for the Index are identified as such using the eligibility criteria set forth in this Prospectus under “Index Information.” The Index is rebalanced quarterly. Rebalancing is effective as of the market close of the third Friday in March, June, September and December. The reference dates for the data used in the rebalancing are at the close of trading on the last trading day in February, May, August and November, respectively. As of August 8, 2013 the Index was comprised of 126 securities.

The Fund intends to invest entirely in securities included in the Index; however, there may also be instances in which the Fund may be underweighted or overweighted in certain securities in the Index, not invest in certain securities included in the Index, purchase securities not in the Index that are appropriate to substitute for certain securities in the Index or utilize various combinations of the above techniques in seeking to track the Index.

You can find the complete prospectus: HERE

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